Hillary Clinton is more and more likely to become the next President of the United States. The price of her nomination contract on Intrade has jumped to the 60 area, meaning she has a 60 percent chance of winning the nomination. No one else is even close. The market thinks that Bill Richardson is likely to be her running mate. Speculators think that this ticket will win the election, although they are not as sure of that. They are very sure that Democrats will retain both Senate and House control.
A Clinton II presidency will affect taxes, stock and bond prices, dollar and gold prices, and a great deal else. Speculators and planners will be watching closely her every word in order to discern the material impacts of her possible policies. Long before she is elected, asset prices will begin to move in anticipation of potential legislation and policy changes. There are certain areas that Hillary Clinton is very interested in that will affect many Americans and the portfolios of many Americans.
Interesting questions arise. Will Bill Clinton serve in a new Clinton administration? Will he have a marked influence on Hillary’s policies? Will her fiscal and monetary policies look like his? Will she be her own woman?
I will briefly summarize a few of Hillary’s currently indicated directions. This usually is a valuable exercise. Elected officials often follow the signals they emit during their campaigns. But it is an iffy exercise. Events overtake a president and lead to unexpected twists and turns. I also cannot resist offering a few of my own jaundiced reflections. It is extremely difficult to watch multiple American tragedies unfolding before our eyes and not say something about them. And who knows? Maybe Hillary or someone close to her will read this and see some light.
Hillary would like to end the war in Iraq. Bill Richardson even more plainly wants to end it. The idea is to shift the $450 billion going into warfare into domestic concerns like health care, education, and energy. Such a platform is a sure winner. But Richardson as Vice-President will have limited influence. Hillary will find herself drawn into the foreign policy game just as her husband was.
Hillary as President will curtail U.S. military operations in Iraq but not end them. She has promised to end the war, but at the same time she promises to transform and continue it. She says she will retain a significant force and continue to try to produce country-wide military and police forces, attack terrorists, and provide materiel. She will call for more equipment for the area and fewer personnel. She will talk tough to Iraq’s leaders.
Her promise to end the war is an empty one. Since she and the U.S. establishment want to produce a stable Iraq allied to the U.S., she can’t end the war because that will produce the opposite consequences. Iraq will disappear and be replaced by a partitioned country with many frictions: between Iranian and Iraqi Shiites, between Iraqi Shiite factions, between Sunnis and Shiites, between Turkey and Kurds, etc. The bloodthirsty terrorists of Al-Qaeda will ally themselves with whomever they can to lever their position.
Events in Iraq are unpredictable. Both the U.S. and Hillary are willing hostages to them. Even under the cover of a democracy, a strong man could arise, another Saddam. Which way will Hillary go? Will she bite the bullet and withdraw, letting the chips fall where they may? Or will she succumb to the urge to shape events and control Iraq’s future? Like her husband, she will do both. She will straddle the issue. Just as he bombed and bombed, she will try to substitute equipment for manpower. She will withdraw some men but not all; and she will not withdraw power and interference. She will compromise between those voices urging faster exit and those counseling disaster if she withdraws too quickly. In other words, the war will drag on until the balance of power shifts to install a regime or regimes that keep power.
Hillary on the Iraq War is a continuing disaster. She will not exercise a foreign policy leadership that will make a real difference. She has already joined others in her party who promise to heat up U.S. efforts in Afghanistan. Adjacent Pakistan also continues to heat up as another hot spot.
On energy, Hillary is a booster of the Apollo Alliance. She supports renewable energy sources, ethanol, biofuels, clean coal, and measures to reduce global warming, which are all popular but costly, wasteful, and ineffective ideas. None of these measures will reduce America’s oil dependence, as she claims to want. Only a big shift into nuclear power will accomplish that. However, she is at best lukewarm and/or really cold on nuclear power plants. She thinks the public is against them ("so hard to site them") and that they cost too much ("so hard to fund them.") Since she could exercise leadership on nuclear power and isn’t, she is unlikely to go in that direction. Instead, in a speech on Feb. 26, 2007, she called for an Apollo Project for energy that would end "tax breaks for big oil" and subsidize research and development of clean fuels.
Hillary on energy is a disaster, but so has been every administration for a long time. U.S. energy policy is a huge and stupid tragedy, and Hillary will play a lead role in continuing it.
Hillary hasn’t moved an inch on HillaryCare. The Congress, with benighted public support, has moved in her direction, enacting universal health care piece by piece. Hillary will extend health care benefits and introduce price controls on insurers. She wants full and universal coverage for all Americans. On paper everyone will have health care. In reality, there will be rationing and price controls. American health care will deteriorate even further. Will Americans care? Will they fly to India or Thailand where they can get better, faster, and cleaner health care? Hardly likely. Unlike Canadians suffering with their national health care system who have been coming here, where will Americans turn? They will wait, suffer, and die before their time. The only bright side is that this will provide a background for those who see some advantage in running against the system and drastically changing it. Nothing less will suffice at this point than completely dismantling the health care monstrosity.
Hillary on health care is a continuing disaster. George Bush II played his role in this tragedy by introducing the prescription drug benefit and failing to reform the system in any way.
In another sign that she does not understand economics and/or wants to make political hay, Hillary wants women by law to be paid the same as men are. This sounds good to untutored American ears, who think this is a matter of simple justice. However, if women were systematically being underpaid for no good reasons, wouldn’t those same businessmen who are supposed to be so greedy rush in and hire them at $0.75 on the dollar? Shawn Ritenour explains some of those good reasons for men-women pay differentials here, and Thomas E. Woods, Jr. explains that "never-married women of comparable education and experience and who work full time have the same incomes as their male counterparts" here. Raising women’s pay above the market level that takes into account compensating differentials (related to such factors as on-the-job training, length of tenure, job interruption, and time spent with family) will put women out of work.
In an interesting pair of contradictory statements from the Hillary campaign site from which I draw her positions, we are told that "Hillary has stood firm as an advocate for a woman’s right to choose." Hillary favors Roe v Wade. She is in favor of abortion. But a few sentences later we read this: "As president, Hillary will continue her lifelong fight to ensure that all Americans are treated with respect and dignity." Apparently, babies in the womb do not count as Americans. Moreover, Hillary is known as a champion of children: "America is ready for a president who fights for our children." She has a long slate of legislation relating to children, including a new proposal to extend pre-kindergarten schools to all 4-year-olds. Why then does she not favor the babies who would be born? Maybe it’s because they can’t vote.
Hillary on the American family is yet another continuing disaster. In the Clinton II realm, the government will step up its invasion of the family. The State long ago crossed the boundary into American family life in a largely unnoticed and unheralded stealth invasion. Hillary will extend the State’s victory over the American family and consolidate that control.
Like all presidents, Hillary can be counted on to push for a number of favorite hobby-horses. Hers are many. They include public schools in overseas countries, support of Israel, government reform, voting reform (including same-day registration and an Election Day holiday), and working with the U.N.
Political government under Hillary will grow larger, just as it has under just about every president ever elected. This process can go on for some time as there is a lot of ruin in a country. When major American establishment figures start talking different games than the ones we’ve been hearing for the last 100 years, then we’ll know that some real change is in the air. This has not happened yet. In the meantime, the only consolation is that the State is running into diminishing returns. We can see this in the projected deficits to fund the government’s programs. We can see it in the difficulties and cutbacks in countries overseas. Economics is a constraint on how far the State can go. Clinton II will be operating under constraints. Unfortunately, they are not yet tight enough to prevent her from continuing the tragic policies of her predecessors and placing her own personal stamp upon them.
Michael S. Rozeff [send him mail] is a retired Professor of Finance living in East Amherst, New York.